Chapter 4 - have to be a bank As interest rates go up you...

Chapter 4 There are two types of ways to “hold” money: interest bearing assets and non-interest bearing assets. The reason why it’s not feasible to put all of your money in interest bearing assets is that the transaction costs are high. Non-bonds are convenient . (i.e. Can’t rent a locker with cash at CRC, as it increases liability.) The money can’t be let back out of a buzzcard account, cause then Georgia Tech would

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Unformatted text preview: have to be a bank. As interest rates go up, you hold less and less money. When interest rates are really high, the price of the bond is low. When interest rates are really low, the price of the bond is high. Easy Money Policy- Interest Rates go down...
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